Excess withdrawl from capital of llp by a company - deposit
This query is : Resolved
18 April 2014
4) Will excess withdrawal of capital from LLP by a company (partner in the LLP) be treated as deposit or not?
18 April 2014
Meaning of drawings – Drawing means withdrawal of money from the capital by a partner from partnership firm for personal purposes
Drawings in relation to a company:
Company being an artificial person generally withdraws money from the partnership as disinvestment.
Excess withdrawal of capital by a company from LLP:
According to Rule 2 (c) of Acceptance of Deposits Rules, “Deposits includes any receipt of money by way of deposits or loan or in any other form, by a company unless otherwise exempted”
Thus the withdrawal from LLP (in excess of capital) may be treated as deposits and the same can be treated as deposits in “other forms”.
For further queries & clarifications visit www.thecompanydesk.webatu.com
Or write us at thecompanydesk@gmail.com
The Company Law Desk
Drawings in relation to a company:
Company being an artificial person generally withdraws money from the partnership as disinvestment.
Excess withdrawal of capital by a company from LLP:
According to Rule 2 (c) of Acceptance of Deposits Rules, “Deposits includes any receipt of money by way of deposits or loan or in any other form, by a company unless otherwise exempted”
Thus the withdrawal from LLP (in excess of capital) may be treated as deposits and the same can be treated as deposits in “other forms”.
For further queries & clarifications visit www.thecompanydesk.webatu.com
Or write us at thecompanydesk@gmail.com
The Company Law Desk
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